SEP IRA Contribution
Sole Prop has 1 ee and contributes 20% of his adjusted net income for himself. Does same % contribution apply for ee or is it 25% of her gross? Thx
Sole Prop has 1 ee and contributes 20% of his adjusted net income for himself. Does same % contribution apply for ee or is it 25% of her gross? Thx
Permalink Submitted by mk foss on Tue, 2009-10-06 21:10
It should be 25% of the employee’s gross. The business owner contributes 20% of his profit reduced by one-half his SE tax – that’s the equivalent of 25% of gross.